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VAT pro-forma poser

VAT pro-forma poser

We have a client who pays on pro-forma due to his bad payment history. He paid us upfront by BACS the net amount but has not paid the VAT on the invoice we subsequently issued him. He is proving very elusive. He is planning to use us again in the summer and hence we will of course insist on payment of the old VAT + new invoice + new VAT all up front this time. However, if he doesn't use us we'll envoke our watertight case to sue him but I don't want to incur legal costs unless I really have to.
Does anyone out there know of any accounting tricks to get this money back quickly? Our year-end is 31 March. I will not be providing for this debt due to our strong legal position.
Alan Hansford


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By neileg
28th Feb 2001 11:17

I agree with Neville
As for legal costs, surely the small claims procedure in the County Court would be appropriate.

When I was in practice, I had a client who I took to court and eventually had baliffs distrain. He than rang up and asked if I would still act for him!

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28th Feb 2001 08:59

I am sorry if I am missing the point, but the usual reason for issuing a pro-forma is so that you get paid before you issue the goods or perform the service - precisely the reason in this case. Did your client pay what you asked for on your pro-forma invoice or did he pay you short ? If he paid what you asked for then he has done no wrong, if he paid you short why did you do the work. Either way it would appear the fault lies with you.

In a case of this type going to court, unless the sums are large and your 'client' has accessable assets, is probably a waste of time & money. You should get judgement very easily, uncontested probably, but getting the money is another matter.

Your only realistic option is to wait for him to come back for more work, make sure you issue a pro-forma for the gross amount plus arrears, and do nothing until he pays in full.

If you can find an 'accounting trick' that magics a bad debt in then keep it very quiet and make yourself a fortune - as you will have found the holy grail of credit control.

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